House week in review

The issue of public pension reforms moved closer to some sort of resolution in the House last week as the chamber approved its version of a public pensions overhaul bill, along with a separate bill that many members say will drum up necessary revenues to fund the reforms.

Both pieces of legislation were approved largely along party lines with the pension reform bill, Senate Bill 2, passing by a vote of 55-45 and the revenue bill, House Bill 416, clearing the body by a vote of 52-47. Some voting against the legislation in the House voiced problems with the procedural handling of the two bills while supporters of both the amended SB 2 and HB 416, sponsored by House Speaker Greg Stumbo, assured all members that both bills were in order.

Like the Senate proposal, the House version of SB 2 would require the state or the local government employer to fully fund the “actuarial required contribution” (ARC) to whichever of the six Kentucky Retirement Systems’ pension plans serves the employer’s workers. But instead of doing away with retiree cost-of-living raises (or COLAs) the House version would allow retirees to receive 1.5 percent raises if they are properly authorized and pre-funded by the General Assembly. The House also voted to keep its current defined-benefit retirement plan for future workers who are vested in the state retirement system instead of switching them over to a hybrid cash balance plan as proposed by the Senate—although the General Assembly could modify benefit factors, contribution rates, and eligibility rules for future workers under SB 2 which it cannot do currently due to “inviolable contract” provisions in state law.

Full funding of the ARC—which actuaries say will help the state pay down an estimated $30 billion in unfunded pension debt over the next three decades—is estimated to cost the state around $100 million per year beginning in the next state budget cycle. That leads us to HB 416 which, like SB 2, is very likely to end up in a conference committee made up of both House and Senate members that will try to reach a compromise on the legislation.

As it stands right now, HB 416 would help pay the state General Fund’s $100 million annual ARC payment through proceeds from potential expansion of Kentucky Lottery game offerings and a portion of the proceeds from wagers on previously-run horse races (known as instant or “historic” racing). The state’s take is expected to total around $74 million in 2019 and more in subsequent years, proponents of HB 416 say, adding that use of lottery money from expanded offerings like Keno and iLottery would not affect dedicated lottery funding of state-funded scholarships through the KEES (Kentucky Educational Excellence Scholarship) program.

Before the House floor vote on HB 416, the members were told that passage of a revenue bill to help fund pension reforms laid out in SB 2 is necessary to avoid a “special” legislative session later this year. And, constitutionally, all revenue bills must originate in the House—not the Senate. But concerns about both bills—especially their handling procedurally—lingered after the House vote on both measures.

Some members expressed concerns about whether proper risk analysis had been performed on the House version of SB 2; others expressed doubt on whether or not HB 416 received a passing vote in the House (In odd-year legislative sessions, bills raising or appropriating revenue must receive a 3/5 vote in both chambers, or 60 votes in the House and 23 in the Senate) after clearing the House chamber by a margin of 52-47. Those concerns will likely be addressed in conference committees on SB 2 and HB 416 in this session’s final days.

What have been called “unintended consequences” of the so-called “pill mill bill”, or HB 1, passed during the 2012 special legislative session were also addressed last week with House passage of HB 217.

Cleared by the House on a vote of 99-0, HB 217 would alleviate some burdens of the mandatory controlled substance reporting law carried by providers and patients. Mandatory reporting to KASPER (Kentucky All Schedule Prescription Electronic Reporting system) would be lifted for hospitals and long-term care facilities, which typically provide one or two doses or “unit” dosing at set times, and exemptions would be made for post-surgery patients, end of life patients, and some other patients who may need increased pain management. HB 217 now goes to the Senate for its consideration.

A bill that would set new safety requirements for Kentucky public schools to prevent tragedies like the December school shooting that left 20 children and six school workers dead in Newtown, CT, has also passed the House and gone to the Senate.

HB 354 is largely based on the work of the House Subcommittee on School Safety formed earlier this year. It would codify several new school safety requirements, including in part: adoption of school emergency plans for disasters and lockdowns, additional emergency drills, access to school floor and emergency plans by first responders, and visible numbering of windows, door and hallways in each school. Proponents of HB 354 called it “a start” to addressing the safety needs of our schools, and voted 96-0 for its passage.

With fewer than eight legislative days remaining in the 2013 Regular Session, the chance for bills to be enacted into law during this short session is narrowing. You can stay informed of daily legislative action on bills of interest to you a few ways: Log onto the Legislative Research Commission website at www.lrc.ky.gov; Call the LRC toll-free Bill Status Line at 866-840-2835; Find committee meeting schedules online, or by calling the LRC toll-free Meeting Information Line at 800-633-9650. To comment on a bill, please call the toll-free Legislative Message Line at 800-372-7181.